AT&T Back In Black

AT&T Inc. swung to a fourth-quarter profit as the company improved its wireless revenue and shed the burden of its customer-losing pay-TV business in 2021, reports The Wall Street Journal.

The wireless-and-broadband internet provider said Wednesday it expects to continue to boost revenue in its core cellular business while cutting overall costs in 2022. It said it expects to complete the merger of its WarnerMedia unit with Discovery Inc. in the second quarter, further streamlining its operations.

The Dallas company’s sale of its film-and-TV business extends a rapid-fire series of deals it launched in 2021 to wean itself off entertainment. The company last year closed the sale of a stake in DirecTV to private-equity company TPG, ceding operational control of the unit in the process. It also sold all of the pay-TV company’s operations in Latin America.

On Wednesday, AT&T projected overall 2022 revenue will grow in the low single digits above last year’s $153.2 billion benchmark, which excludes its already-divested pay-TV business. This year’s revenue target assumes a full year of WarnerMedia ownership. AT&T plans to divest WarnerMedia before then, though its shareholders will retain a 71% ownership stake in the new company, which will be called Warner Bros. Discovery. The media division set a full-year revenue target between $37 billion and $39 billion.

Under pressure from investors to show progress on its strategic shift, AT&T had already announced quarterly subscriber gains for its wireless phone unit and HBO division. Shares of AT&T, which fell 14% in 2021, have gained 7.6% so far this year. The shares were little changed early Wednesday.

After issuing preliminary results earlier this month, AT&T on Wednesday reported a final net gain of 884,000 postpaid phone subscribers over the December quarter, leading the wireless industry. T-Mobile US Inc. said it added roughly 844,000 of those subscribers over the same period. Verizon said Tuesday it ended the quarter with a net gain of 558,000 postpaid phone connections.

The company previously reported that its HBO unit, which includes HBO Max, ended 2021 with 73.8 million subscribers world-wide. That figure topped the target of 70 million to 73 million subscribers issued earlier in the year. The HBO unit’s domestic subscriptions hit 46.8 million at the end of the year.

In the December quarter, AT&T’s overall profit rose to $5.0 billion, or 69 cents a share, compared with a year-earlier loss of $13.89 billion, or $1.95 a share. A $15.5 billion accounting charge from the write-down of the telecom giant’s DirecTV unit skewed the year-earlier result.

Overall revenue fell to $41 billion from $45.7 billion a year earlier, reflecting the satellite-TV operations’ absence. Excluding the divestiture and other items, AT&T said it had adjusted earnings of 78 cents a share, topping Wall Street’s 76-cent forecast.